JC Penney: Department Specialty story? Mall Within a Mall?…Whatever!

You say tomato, I say tomahto. And, “…frankly my dear, I don’t give a damn!” You can call Ron Johnson’s visionary reinvention model currently under “construction,” at least the physical store component, whatever you want. He varies the definition himself, attempting to provide a clear snapshot of what defies a clear snapshot. You have to see it, feel it, and be wrapped in the energy of it, which I was fortunate enough to experience recently. Ron Johnson walked me through a “mock-up” of what their stores are going to look like once the reinvention is complete, which at their current rate of progress, he believes,can beat his stated deadline of 2015.

First of all, there is nothing similar in retailing today. It will end up being like an enclosed mini-mall, with 100 to 120 branded specialty shops that they will curate from the roughly 400 they presently have (including private and exclusives), and also new brands they are receptive to, or seeking, from around the world, such as Joe Fresh from Canada. And speaking of fresh, the whole experience is like a breath of fresh air.

These branded boutiques, like Giggles, Levi’s, Martha Stewart, Izod, Arizona, the new and exciting JCP brand, Sephora and many others, still under wraps, are designed and merchandised by the brands themselves, so the look, ambiance, aura and the whole DNA of the brand is presented and connects with customers as the brand intends it to. Only the associates will be JC Penney employees. And now hear this. The whole process of selecting associates will be just as is done today by most of the specialty branded retailers. Chico’s, A&F and others hire from their loyal customer base. Why? Because those customers love the brand, which reduces the training curve and also enhances their ability to share their “love” with the customers (read: incredible customer relationship building). So, the brands will direct JC Penney as to the types of associates that fit their brand’s DNA. JCP will then hire and train these brand “ambassadors” who will then emotionally connect with the customers.

These shops line the 14-foot-wide “streets” of this “mall” called JC Penney. Streets that will have activities going on, tables with iPads to play with over a coffee and pastry from Martha Stewart’s kitchen, and more, all turning the JCP mall into a more exciting place to hang out than the bigger mall they now anchor. And, guess what? When you get people “hanging out,” they not only start telling their friends, “…I’ll meet you ‘on the street,’” then all of them start spending more time shopping the shops, which means they will end up spending more, and they will come back more often. Guys, this is called ramping up on productivity big time. This is why the pricing strategy will ultimately work. And, this is why the financial guys, including William Ackman, can see sugar plums dancing in their heads, projecting $350 a square foot in revenues vs. the current, roughly $135.

Is this rocket science? I don’t think so. I may call it visionary, but even Ron Johnson says, “Hey… this is pretty simple.” I say simple in concept, but awesome in execution, which indeed, is Ron Johnson’s uber-challenge. It is beyond a tall order. It’s truly paradigm-changing tough. And “it is a marathon, not a sprint,” as Johnson has said.

When you are physically in the middle of one of the streets, facing these branded boutiques; when you see it, feel it, and are wrapped in the huge, crisp, clear and powerful energy of it, you will believe this vision of Ron Johnson’s is coming true. And, you can call it whatever you want, because there’s nothing to compare it to. It is a game-changer.